district of connecticut commission, et al ... ass’n, inc., 131 f.3d 320, 322 (2d cir. 1997)...

UNITED STATES DISTRICT COURTDISTRICT OF CONNECTICUT

EQUAL EMPLOYMENT OPPORTUNITY :COMMISSION, et al., :

Plaintiffs, ::

v. : No. 3:01CV378(AHN):

BEAUTY ENTERPRISES, INC., :Defendant. :

RULING ON MOTION TO ENFORCE SETTLEMENT AGREEMENT

Plaintiff EEOC and individual intervenor-plaintiffs

(collectively “the plaintiffs”) filed a motion to enforce a

settlement agreement they allegedly reached with defendant Beauty

Enterprises, Inc. (“BEI”) [doc. # 174]. The plaintiffs argue

that the parties entered into a binding, enforceable settlement

agreement. BEI counters that the parties did not intend to be

bound by the terms of their negotiations absent a formal, signed

and entered Consent Decree. Counsel for the parties filed

affidavits and exhibits in support of their positions and the

court heard oral argument on the motion on August 30, 2007. For

the reasons that follow, the plaintiffs’ motion is denied.

BACKGROUND

This case involves an "English only" policy that BEI

instituted in 1980. The policy instructs that BEI’s employees

must speak only English at its Hartford, Connecticut warehouse.

In March 2001, the Equal Employment Opportunity Commission

("EEOC") brought this action on behalf of 23 current and former

BEI employees alleging that BEI’s “English only” rule violates

Case 3:01-cv-00378-AHN Document 185 Filed 10/31/07 of 23

The plaintiffs also informed the court that, prior to1

trial, they planned to take an interlocutory appeal from thecourt’s ruling on a disparate impact jury instruction. The courtgave them leave to do so. See EEOC v. Beauty Enters., Inc., No.3:01-cv-378, 2005 WL 2764822, at *11-13 (D. Conn. Oct. 25, 2005).

BEI made clear during negotiations that it did not want2

plaintiffs who were current employees of BEI to receive a directsettlement payment until they left the company. (Def.’s Aff. ¶5). The plaintiffs agreed to this condition. (Pl.’s Aff. ¶ 17).

2

Title VII of the Civil Rights Act of 1964. Seven of those

current or former employees have also intervened as plaintiffs

and filed individual claims against BEI under various state and

federal laws.

Trial of this case was set to begin in September 2005, but

after an unsuccessful jury selection, the court reset the trial

date for January 2006. During that time, settlement1

negotiations between the parties began in earnest. These

negotiations culminated in a settlement conference held on May

30, 2006 before Judge Nevas and Magistrate Judge Fitzsimmons, at

which BEI agreed in principle that it would pay $325,000 to

settle the case, subject to several issues that remained

outstanding. At that time, the main unresolved issues were: (1)

how to defer payment of the settlement amounts to the employees

who were still working for BEI; (2) the content of a revised2

language policy; and (3) the hiring of an outside

trainer/consultant.

After the settlement conference, the parties continued to


The defendant states, however, that he was uncertain3

whether all of the individual plaintiffs had approved the 401(k)plan concept. (Def’s Aff. ¶ 15).

3

propose and discuss a proper deferred payment vehicle for current

employee-plaintiffs at BEI. Many ideas were discussed, but on or

about December 21, 2006, the parties seemed to agree that the

acceptable solution was for BEI to deposit the settlement amounts

into 401(k) plans for each current employee-plaintiff. Both3

sides understood that BEI planned to make two separate 401(k)

disbursements over the course of two fiscal years because the

settlement amount for each current employee exceeded the maximum

allowable yearly contribution.

After the May 2006 conference, another issue arose between

the parties, namely the employment status of Madelyn Perez, a

temporary employee at BEI. BEI wanted Perez to become a full-

time employee, but to do this, BEI stated that she would have to

sign the “English only” policy and the EEOC would not allow this

to occur.

In addition, BEI informed the plaintiffs in December 2006

that the payment of the remaining settlement amount (minus the

amount earmarked for the 401(k) accounts of current employees),

approximately $244,000, would be split between two fiscal years.

BEI was under the impression that the parties agreed to this term

at the May 30, 2006 conference, but the plaintiffs adamantly deny

that they agreed to a division of the remaining settlement


4

amount. The parties continued to communicate regarding the terms

of the settlement until January 24, 2007, when counsel for BEI

announced at a follow-up settlement conference before Magistrate

Judge Fitzsimmons that his client no longer wished to settle and

wanted instead to proceed to trial.

DISCUSSION

The plaintiffs argue that as a result of the May 30, 2006

conference, the parties had an “oral settlement agreement” that

was later memorialized in an exchange of draft consent decrees

and other letters and emails. The plaintiffs now seek to enforce

the terms of that agreement. BEI, on the other hand, argues that

the parties had no intent to be bound by anything less than a

signed writing, and that all negotiations until that point were

just that - negotiations - and did not amount to an enforceable

contract.

A. Governing Law

To determine whether an enforceable agreement exists between

the parties, the court must establish whether federal common law

or Connecticut law applies. The Second Circuit, much like many

other circuit courts of appeal, has not clarified which law

governs when a court must decide whether to enforce a settlement


See Omega, 432 F.3d at 444 (holding that in a case based on4

diversity jurisdiction, it will apply state law to determine ifan enforceable agreement was reached); cf. Ciaramella v. Reader’sDigest Ass’n, Inc., 131 F.3d 320, 322 (2d Cir. 1997) (holding ina case with ERISA, ADA and New York employment law claims that“[b]ecause we find that there is no material difference betweenthe applicable state law or federal common law standard, we neednot decide this question [of what law to apply] here.”). Othercircuits have struggled with this issue and have reached variedconclusions. See Hayes v. Nat’l Serv. Indus., 196 F.3d 1252,1254 (11th Cir. 1999)(applying state law to determine ifsettlement existed between two private parties); cf. Brewer v.Muscle Shoals Bd. of Educ., 790 F.2d 1515, 1519 (11th Cir. 1986)(applying federal common law to determine if settlement existedwhere the United States was a party). Several circuits have heldthat when an oral settlement agreement is in dispute in a TitleVII case, federal common law applies. See, e.g., Stroman v. WestCoast Grocery Co., 884 F.2d 458, 461 (9th Cir. 1989)(applyingfederal law to all aspects of settlement in a Title VII action);Taylor v. Gordon Flesch Co., Inc., 793 F.2d 858, 862 (7th Cir.1986)(applying federal law to determine validity of an oralsettlement agreement in a Title VII case); Fulgence v. J. RayMcDermott Co., 662 F.2d 1207, 1209 (5th Cir. 1981)(same).

The court in Winston did not state whether the case arose5

under federal question or diversity jurisdiction. See generallyWinston, 777 F.2d 78 (2d Cir. 1986).

5

agreement in a case arising under federal question jurisdiction.4

In fact, the court has utilized two different sets of factors

based on three different sets of laws. One set of factors,

expressed in Winston v. Mediafare Entertainment Corp., 777 F.2d

78 (2d Cir. 1986), uses New York law and Restatement Second of

Contracts to determine the parties’ intent to be bound by a

contract. The Second Circuit then used a different set of5

factors in Omega Engineering, Inc. v. Omega, S.A., 432 F.3d 437


The court went on to note that the Restatement Second of6

Contracts (on which the Winston factors are based in part) is asource of law that Connecticut courts have also looked to forguidance. Omega, 432 F.2d at 444.

6

(2d Cir. 2005), based on Connecticut law. The court noted that6

in Omega this was appropriate because the district court’s

jurisdiction was based on the diversity of the parties, not on a

federal claim.

This case was brought pursuant to Title VII of the Civil

Rights Act and hence jurisdiction is based on a federal question.

Though the factors in Omega and Winston are very similar, the

plaintiffs argue that only Connecticut law applies. They argue

that Winston is based on New York law and therefore provides no

authority in this case.

On the one hand, the Second Circuit stated in Omega that the

factors in Winston are actually “common law,” presumably federal

common law. Omega, 432 F.3d at 444; see Board of Trustees v. VIC

Constr. Corp., 825 F. Supp. 463, 466 (E.D.N.Y. 1993) (holding

that in an ERISA case, federal common law applied to determine

whether the parties reached an enforceable settlement agreement

and using the Winston factors in its analysis).

On the other hand, in its most recent opinion on the

enforcement of settlement agreements, the Second Circuit stated

that because New York law and federal common law were

“indistinguishable,” it chose not to decide whether state or


7

federal law would apply in a federal question case. See Powell

v. Omnicom, 497 F.3d 124 (2d Cir. 2007). In Powell, the court

stated:

It is unclear whether the settlement of federal claimsis governed by New York law or federal common law. InCiaramella v. Reader's Digest Ass'n, 131 F.3d 320 (2dCir. 1997), we declined to decide this question becauseNew York law and federal common law were materiallyindistinguishable. Id. at 322; see also Monaghan v.SZS 33 Assocs., 73 F.3d 1276, 1283 n.3 (2d Cir. 1996)(“[T]he federal rule regarding oral stipulations doesnot differ significantly from the New York rule.”). The same is true here; therefore, we will apply NewYork and federal common law interchangeably.

Powell, 497 F.3d at 129 n.1. The court went on to apply the

Winston factors. Id. at 129. In the absence of clear guidance

on this issue, the court will apply both the factors developed

from Connecticut law and those from federal common law.

Fortunately, as applied to this case, both sets of laws produce

the same outcome.

B. Is There an Enforceable Agreement?

The plaintiffs assert that the parties agreed to all of the

material terms of the settlement and that BEI simply had a change

of heart and therefore no longer wishes to go forward with the

settlement. BEI counters that neither party intended to be bound

by terms that the parties had not yet fully negotiated and had

not memorialized in a mutually agreeable writing.

1. The Parties’ Intent

The plaintiffs strenuously argue that the parties entered


At the hearing on the motion, the plaintiffs stated that7

the terms of the agreement were finalized sometime in December2006, instead of at the May 30, 2006 conference. (Tr. 15).

8

into an oral settlement agreement at the May 30, 2006 settlement

conference before this court. Under Connecticut law, the7

“intention of the parties manifested by their words and acts”

determines whether the parties reached a settlement agreement.

Hess v. Dumouchel Paper Co., 154 Conn. 343, 347 (1966). Federal

law also follows this principle. See, e.g., Fulgence v. J. Ray

McDermott & Co., 662 F.2d 1207, 1209 (5th Cir. 1981) (“Federal

law does not require . . . that the settlement be reduced to

writing. Absent a factual basis rendering it invalid, an oral

agreement to settle . . . is enforceable against a plaintiff who

knowingly and voluntarily agreed to the terms of the settlement

or authorized his attorney to settle the dispute.”). To

determine the parties’ intent, the court may consider “oral

testimony or correspondence or other preliminary or partially

complete writings.” Winston, 777 F.2d at 81; Omega, 432 F.3d at

444 (citing Restatement (Second) of Contracts § 27 cmt. c

(1981)).

If the parties intended to agree to the material terms of

the settlement, they cannot repudiate the agreement, even if it

is not in writing. See Millgard Corp. v. White Oak Corp., 224 F.

Supp. 2d 425, 432 (D. Conn. 2002). The court in Millgard

explained, “the only essential prerequisite for a valid


9

settlement agreement is that the parties mutually assent to the

terms and conditions of the settlement.” Id. An important

caveat to the binding effect of an oral settlement is that

parties may specify through words and actions that they will not

be bound until all of the terms are in writing to both parties’

satisfaction. See Lambert Corp. v. Evans, 575 F.2d 132 (7th Cir.

1978)(federal law); Aquarion Water Co. v. Beck Law Prods. &

Forms, LLC, 98 Conn. App. 234, 239 (2006) (Connecticut law). It

is a long-standing principle of contract law that “if the parties

contemplate a reduction to writing of their agreement before it

can be considered complete, there is no contract until the

writing is signed.” 1 Samuel Williston & Walter H. E. Jaeger, A

Treatise on the Law of Contracts § 28 (3d ed. 1957). In such

situations, parties “can maintain complete immunity from all

obligation, even though they have expressed agreement orally or

informally upon every detail of a complex transaction. The

matter is merely one of expressed intention.” 1 Arthur L.

Corbin, Corbin on Contracts § 30 p.98 (1963).

Accordingly, the court must examine the parties’ intent and

it will apply both the Winston and Klein factors in its analysis.

2. Winston Factors

To determine whether the parties intended to enter into a

binding oral settlement agreement, the court will first apply the

factors the Second Circuit established in Winston: “(1) whether


In addition, at the May 30, 2006 conference in which the8

plaintiffs insist an oral settlement agreement was reached, theundersigned instructed the parties to reduce their agreement towriting due to the complexity of the case.

Because both parties agreed that a consent decree would be9

the format for their settlement, each draft of the settlementagreement was entitled “Consent Decree.” The court thereforewill use the term “Consent Decree” or “draft Decree” to identifythe document the parties drafted that contained the terms oftheir alleged agreement.

10

there has been an express reservation of the right not to be

bound in the absence of a writing; (2) whether there has been

partial performance of the contract; (3) whether all of the terms

of the alleged contract have been agreed upon; and (4) whether

the agreement at issue is the type of contract that is usually

committed to writing.” Winston, 777 F.2d at 80.

a. Express reservation

The plaintiffs admit that they insisted from the outset of

negotiations that the settlement agreement had to be entered with

the court in the form of a Consent Decree instead of some other

more informal format. (Pl.’s Aff. ¶¶ 6-8; Def.’s Aff. ¶¶ 8-9). 8

BEI ultimately agreed to this condition. (Def.’s Aff. ¶ 9).

This speaks to the first Winston factor: the plaintiffs expressly

reserved the right not to be bound in the absence of a writing

and convinced BEI to agree to this condition. But this is not9

the only indication that the plaintiffs did not and could not

assent to an oral settlement agreement.

The plaintiffs argue that because BEI never expressly


11

reserved the right to be bound only with a written agreement,

that it is “legally irrelevant” that the plaintiffs required that

the EEOC’s headquarters approve a written version of the

agreement “to ensure that it reflected the terms of the May 2006

Settlement.” (Pl.’s Reply Br. 4). On the contrary, the Second

Circuit has stated that if “either party communicates an intent

not to be bound until he achieves a fully executed document, no

amount of negotiation or oral agreement to specific terms will

result in the formation of a binding contract.” Winston, 777

F.2d at 80 (emphasis added). The need for the EEOC to approve

the content of the parties’ draft consent decree before execution

is therefore highly relevant to when and whether the parties

intended to be bound.

In addition, throughout the parties’ correspondence after

the May 30, 2006 conference, the plaintiffs demonstrated that

they conditioned a final settlement on the parties’ ability to

reach an agreement on the remaining outstanding issues, and that

a settlement could not be finalized before the parties resolved

those issues. The emails and letters between the parties’

attorneys are rife with conditional language. In a letter dated

June 16, 2006 from the EEOC’s attorney Liliana Palacios-Baldwin

to BEI’s attorney Rick Robinson, she stated: “I am writing to

confirm our conversation yesterday about a number of remaining

issues that we need to resolve before we can finalize the Consent


12

Decree in this case.” (Pl.’s Ex. 5 at 1). She concluded the

letter with the following statement: “I just want to remind you

that once the Consent Decree is finalized, it will need to be

approved by our headquarters in Washington. I don’t anticipate

this will create any major problems - particularly if we are able

to resolve the above [eleven] issues to the Agency’s

satisfaction.” (Pl.’s Ex. 5 at 2). In an email dated August 29,

2006, Palacios-Baldwin stated to the other plaintiffs’ attorneys

and Robinson: “I [don’t] anticipate any problems ‘closing the

deal’ [and] both parties [are] still actively involved in trying

to close two different parts of the Decree.” (Pl.’s Ex. 7).

Then, in an email on December 11, 2006 from Palacios-Baldwin to

the other attorneys, she stated: “Rick had mentioned wanting to

discuss some issues on the Consent Decree prior to execution.”

(Pl.’s Ex. 8). Finally, in her letter on December 21, 2006 to

Magistrate Judge Fitzsimmons regarding changes in “settlement

negotiations” and BEI’s “newly added material term” regarding the

payment of the remaining settlement amount divided over two

fiscal years, Palacios-Balwin stated: “[U]nfortunately if [this

issue] remains unresolved, the entire settlement is at risk.”

(Pl.’s Ex. 9 at 2). The language that the EEOC’s counsel uses

throughout the parties’ correspondence after the May 30, 2006

conference indicates that the parties were not yet prepared to

enter a final agreement with the court.


13

In addition to the numerous examples of the plaintiffs’

conditional language, BEI also expressed that it intended to be

bound only after the parties signed the draft Decree and it was

entered with the court. In its letter to Magistrate Judge

Fitzsimmons on December 22, 2006, BEI states that it “was ready,

willing and able to fund the [401(k)] contributions next Tuesday,

the day after Christmas, in anticipation that we would sign a

consent decree and the court would approve it.” (Pl.’s Ex. 10).

Notably, BEI did not fund the 401(k) plans as it stated in its

letter to Magistrate Judge Fitzsimmons because the parties did

not sign a finalized Decree.

Indeed, even the language of the draft Decree conditioned

many of the parties’ duties and the timing of the performance of

those duties on the court’s entry of the Consent Decree, which

could not occur until the parties approved, signed and presented

a final draft Decree to the court. For instance, the draft

Decree states: “BEI shall pay the allocated amounts . . . within

fourteen days of the entry of this Decree.” (Pl.’s Ex. 13 at 5);

“No later than thirty days after the entry of this Decree, BEI

shall post . . . a copy of a notice . . . attached hereto as

Exhibit C.” (Pl.’s Ex. 13 at 8); “This [diversity] training

shall take place within one year of the entry of this Decree.”

(Pl.’s Ex. 13 at 10); “Nothing in this Decree shall be construed

to preclude the EEOC from enforcing this Decree in the event that


The most recent version of the draft Decree contains the10

provisions outlined above. (Pl.’s Aff. Ex. 13).

14

any of the Defendants fail to perform the promises and

representations contained herein.” (Pl.’s Ex. 13 at 13).

Neither party removed or objected to these provisions that

conditioned performance on the parties’ presentation of a final,

signed agreement to the court.10

Accordingly, the parties expressed an intent not to be bound

absent a writing and thus they satisfy the first Winston factor.

b. Partial performance

The fact that BEI did not fund the employee-plaintiffs’

401(k) plans is also important to establish the second Winston

factor, namely whether there was partial performance of the

agreement. Indeed, no money changed hands and no other action

was taken to perform any part of the settlement. In addition, in

December 2006 or January 2007, the parties were still involved in

discussions regarding how to make plaintiff Madelyn Perez a full-

time employee so that she too would be eligible for the 401(k)

plan disbursement. BEI insisted that to become a full-time

employee, Perez would have to sign the “English only” policy

because it was still in effect; BEI had made no efforts to adopt

or implement a revised language policy. (Def.’s Aff. ¶ 10).

There is some indication that BEI began a search for an

independent consultant as outlined in the draft Decree, but there


One provision of the settlement even involved the court’s11

performance - namely, the plaintiffs asked that the court vacateits order regarding the disparate impact jury instruction. SeeEEOC v. Beauty Enters., Inc., No. 3:01-cv-378, 2005 WL 2764822(Oct. 25, 2005). BEI and the court acquiesced to this term, butbecause the parties never reported that they had reached a finalsettlement, the court did not vacate the order.

15

is no evidence to support a finding that a consultant was

retained. (Pl.’s Ex. 6). As such, the evidence taken as a whole

demonstrates that the parties did not perform any of the terms of

the draft Decree. 11

c. Agreement on all terms

The third Winston factor seeks to determine whether the

parties agreed to all of the terms of the alleged settlement

agreement. It is clear from the disputed and outstanding issues

outlined above that the parties were in disagreement about many

important terms, such as the timing of BEI’s disbursement of the

settlement amount, Madelyn Perez’s status as an employee of BEI,

and whether the class members that were current BEI employees

accepted the 401(k) plan as an appropriate repository for their

settlement disbursement.

Moreover, though the plaintiffs argue in their papers that

the parties reached an agreement on May 30, 2006, at the hearing

on the motion, the plaintiffs stated that a final agreement was

not reached until sometime in December 2006. (Tr. 25, 62-63).

Even at the hearing, the plaintiffs offered to modify the most


16

recent draft of the Decree to reflect BEI’s request to divide

payment of the settlement amount not subject to the 401(k)

contributions between two fiscal years. Evidently, that term

remained in dispute even after the “final draft” of the Decree

was circulated in December 2006. Accordingly, the parties had

not agreed to all of the terms of the settlement in May 2006 or

at any time thereafter.

d. Normally in writing

The fourth and final Winston factor that the court must

examine is whether the agreement is one that would normally be

reduced to writing. Many courts have enforced oral settlement

agreements, therefore settlement agreements by their very nature

need not be in writing. See, e.g., Brown v. Nationscredit

Commercial, No. 3:99-CV-592(EBB), 2000 WL 888507, at *2 (D. Conn.

2000)(enforcing an oral settlement agreement). The agreement in

this case, however, is complex. The draft Consent Decree,

without exhibits, is 14 pages long. It involves 23 plaintiffs, a

training program led by an independent consultant, a $325,000

settlement amount that must be apportioned to each plaintiff, and

four 401(k) plans to be funded over the course of two fiscal

years. The parties circulated at least four different drafts of

the Consent Decree. When parties believe, as they do here, that

the language and the terms of an agreement are sufficiently

complex to require that they repeatedly redraft it, it follows


As mentioned above, the factors were first developed by12

the Connecticut Supreme Court in Klein and the court examines thefactors as the Second Circuit applied them in Omega. The courthereinafter shall use “Klein” or “Omega” interchangeably todescribe the factors.

17

that it is an agreement of the sort that would normally be

reduced to writing. See Winston, 777 F.2d at 83. The court in

Winston elaborated as follows:

Where, as here, counsel insist on continuallyredrafting the specific terms of a proposed agreement,the changes made must be deemed important enough to theparties to have delayed final execution andconsummation of the agreement. Parties that wish to bebound only upon execution of a formal document agree tonegotiate in that manner because they wish to create awriting that is satisfactory to both sides in everyrespect. It is not for the court to determineretrospectively that at some point in the evolution ofa formal document that the changes being discussedbecame so “minor” or “technical” that the contract wasbinding despite the parties' unwillingness to have itexecuted and delivered. For the court to do so woulddeprive the parties of their right to enter into onlythe exact contract they desired.

See id. The parties demonstrated through their repeated

redrafting that the agreement was complex. They wanted the terms

of the agreement to reflect precisely what they intended and

nothing less. Based on the four Winston factors, the parties

intended to be bound only by a fully executed contract, not an

oral agreement. Therefore the parties never reached a final,

enforceable agreement.

3. Klein/Omega Factors12

The court now will examine whether, under Connecticut law,


18

the plaintiffs and BEI reached a binding contract to settle the

case. In 2005, the Second Circuit examined the factors listed in

Klein v. Chatfield, 166 Conn. 76, 80 (1974), to determine whether

parties to a patent infringement dispute reached an enforceable

settlement agreement. See Omega Eng’g, Inc. v. Omega, S.A., 432

F.3d 437, 444 (2d Cir. 2005). The court noted that the parties

cited to the Winston “common law” factors in their briefs, but it

explained that because the case had been brought based on

diversity jurisdiction, the Klein factors, based on Connecticut

law, provided more appropriate guidance. Id. Those factors

determine the parties' intent from the “[1] the language used,

[2] the circumstances [surrounding the transaction] and [3] the

motives . . . and the purposes which [the parties] sought to

accomplish.” Klein, 166 Conn. at 80; see Omega, 432 F.3d at 444.

The plaintiffs cite a total of 41 cases in an attempt to

convince the court that there was an enforceable settlement

agreement. Most of these cases involved situations where the

parties reported to the court that the case conclusively settled

or the parties read the agreement into the record in open


The plaintiffs cite to the following cases in support of13

their position that this court should enforce the settlementagreement, but unlike the current case, the parties in thesecases reported to the court that they reached a settlement: EEOCv. Kidman, Nos. 04-17005, 04-17489, 2007 WL 1187962, at *1 (9thCir. 2007); Pozzo v. Basic Machinery Co., Inc., 463 F.3d 609, 611(7th Cir. 2006); Omega Engineering, Inc. v. Omega, S.A., 432 F.2d437, 445 (2d Cir. 2005); Acot v. New York Medical College, 99Fed. Appx. 317, 318 (2d Cir. 2004); Doi v. Halekulani Corp., 276F.3d 1131, 1134 (9th Cir. 2002); Foster v. City of New York, No.96-Civ-9271, 2000 WL 145927, at *2 (S.D.N.Y. 2000); In reDragone, 318 B.R. 33, 35 (D. Conn. 2004); Vari-O-Matic MachineCorp. v. New York Sewing Machine Attachment Corp., 629 F. Supp.257, 259 (S.D.N.Y. 1986); Maharishi School of Vedic Sciences,Inc. v. Connecticut Constitution Assoc., L.P., 260 Conn. 598, 602(2002); Acquarion Water Co. v. Beck Law Products & Forms LLC, 98Conn. App. 234, 239-40 (2006); Sicaras v. City of Hartford, 44Conn. App. 771, 772 (1997).

19

court. In Omega, the parties reported to the court that they13

settled the case and drafted a complete agreement in writing to

which all of the parties consented. See Omega, 432 F.2d at 441.

The only remaining issue was whether the parties intended for the

written agreement to be signed before it became binding. See id.

at 442.

First, under Klein, the court in Omega considered the

language used in the agreement, and stated that while it provided

some support for the defendant’s argument that it envisioned

having a signed agreement, the performance of the terms of the

agreement was not contingent upon signing. See id. at 444.

Conversely, in several letters from counsel for the EEOC to

counsel for BEI, she makes clear that “once the Consent Decree is

finalized, it will need to be approved by our headquarters in


20

Washington.” (Pl.’s Ex. 5 at 2). This indicates that even if

the parties assented to the agreement’s terms, the EEOC in

Washington had to “sign off” on the draft Decree before the court

could enter it and before the parties would be obligated to

perform. It is clear from the numerous email exchanges detailed

in the preceding section and from the language of the draft

Decree itself that performance of the terms of the settlement was

contingent upon finalizing an agreement that all of the parties

would approve and sign.

The court noted that under the second Klein factor, the

parties’ motive when they negotiated the agreement was to avoid a

trial. Of course, this is also the motive for almost every party

that negotiates a settlement agreement. In Omega, however, this

was especially relevant because the parties prepared the

settlement agreement literally on the eve of trial. There, the

parties affirmatively reported to the court that the case had

settled and the court postponed the trial that was set to begin

the following morning. Omega, 432 F.2d at 441. The settlement

agreement allowed the parties to avoid “being under the gun of

imminent trial.” Id. at 445. This was not the case here. The

court set the trial in this case for September 2005 and postponed

it because of an unsuccessful jury selection. The parties began

to discuss settlement at that time. After almost seven months

had passed from the date of the May 2006 settlement conference,


21

the parties continued to distribute drafts of the Decree, while

the parties in Omega borrowed a computer in the courthouse to

type up their agreement that same day. See Omega, 414 F. Supp.

2d 138, 142 (D. Conn. 2004).

In addition, this court issued a ruling in October 2005

regarding the EEOC’s request for a disparate impact jury

instruction and stated that it would certify the issue to the

Second Circuit on the motion of a party. See EEOC v. Beauty

Enters., Inc., No. 3:01-cv-378, 2005 WL 2764822, at *11-13 (D.

Conn. Oct. 25, 2005). The EEOC stated that it planned to seek

that appeal. Undoubtedly, the interlocutory appeal of the ruling

would have delayed the trial of this matter by several months.

Thus, the parties’ motive here was to avoid a trial but they were

not “under the gun” to finalize the agreement.

Third, under Klein, the court must examine the circumstances

under which the parties created the agreement. In Omega, the

court noted that the parties reported to the court that they

settled the case and reduced their agreement to writing, and that

the parties viewed the execution of the agreement as merely a

“ministerial” act. See Omega, 432 F.2d at 445. As discussed

above, that was not the case here. The docket sheet reveals that

the parties did not report to either Magistrate Judge Fitzsimmons

or to the undersigned that the case was conclusively settled at

the May 30, 2006 conference or at any time thereafter. EEOC’s


22

counsel stated that the agency’s Washington headquarters had to

approve the agreement before the parties could submit it to the

court for its approval and be bound by its terms. Neither party

signed the draft Decree and the plaintiffs admit that the last

copy that it circulated to BEI still needed to be modified. (Tr.

25, 29-30, 62-63). Accordingly, under the Klein factors, the

parties did not enter into a binding settlement agreement.

B. Promissory Estoppel

The plaintiffs advance another theory under which they argue

that the court should enforce the settlement agreement, namely

promissory estoppel. For the plaintiffs to succeed on a claim of

promissory estoppel, they must show that BEI made a “clear and

definite promise . . . calculated or intended to induce [the

plaintiffs] to believe that certain facts exist and to act on

that belief;” and the plaintiffs must have relied on those facts

and incurred an injury. See Wellington Sys., Inc. v. Redding

Group, Inc., 49 Conn. App. 152, 162 (1998). However, the court

has already determined that the parties conditioned their promise

on a written, signed agreement, and therefore a clear and

definite promise does not exist on which the plaintiffs could

reasonably rely. See R.G. Group, Inc. v. Horn & Hardart Co., 751

F.2d 69, 78-79 (2d Cir. 1984)(“[T]he entire history of the

parties' negotiations made it plain that any promise or agreement

at that time was conditional upon the signing of a written


23

contract. Under those circumstances there never was ‘a clear and

unambiguous promise’ to plaintiffs.”). Because they are unable

to meet the first element of promissory estoppel, the plaintiffs’

argument is without merit.

CONCLUSION

For the foregoing reasons, the plaintiffs’ motion to enforce

the settlement agreement [doc. # 174] is DENIED.

SO ORDERED this the 31st day of October 2007, at Bridgeport,

Connecticut.

_____________/s/______________Alan H. NevasUnited States District Judge


district of connecticut commission, et al ... ass’n, inc., 131 f.3d 320, 322 (2d cir. 1997)...

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